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and i ask you ,did it matter to them if they died? it may to their heirs but waiting for the bigger payment is something they would never live to regret.
Again, it depends. They may not live to regret it, but if they have to live a lesser lifestyle during their younger retirement years by waiting that has to be factored in. Also, I don't know if you've looked at the actuarial tables but the odds of living that extra 4,5,6,7 years declines surprisingly quickly.
There's not a pat answer. I'm thinking of retiring at 61, and collecting ss at 62. I'm single. I will receive a pension and can bridge the year or so after that ok and then take ss at 62. If I don't take ss at 62 it'd be more difficult to retire so why wait until 66 or later when I can do it at 62 and enjoy those 4,5,6 years prior to full SS age without working. Sure my ss income would be less, but think it's a fair trade off.
the fact is you can live on more in the early years by waiting, not less.
by laying out a few years out of savings you can spend a whole lot more early on then you can by filing early.
once ss kicks in the higher payments can refill what was spent down and you do not need to keep as much powder dry with the higher payments to allow for market uncertainty. ss is like having a deferred annuity kick in. only you can't buy a deferred annuity with cola for any where near that cost anywhere as it does not exist.
our withdrawal rate will be higher early on since money i would have to keep liquid for the rest of our lives to pay bills can now be invested at greater returns since we will be less dependant in a few years on our own money and markets and more on a pensionized income from ss at a higher payment..
it does not matter what life expectancy charts show, you only have two possible outcomes. your dead or your alive.
my feeling is if you don't have at least 3 or 4 years of money to layout if you wanted to then your retirement is most likely underfunded to retire early.
it should be a choice if you are in decent retirement shape and not forced to take it early.
those that are not prepared and no longer can work have no choice obviously but that still does not negate the fact they are underfunded.
it should be by choice and how much you spend early on should not be factor if you really have enough to retire that early.
our own unique situations will determine what is right but the options should at least be able to be on the table.
Last edited by mathjak107; 10-02-2014 at 02:47 AM..
the fact is you can live on more in the early years by waiting, not less.
by laying out a few years out of savings you can spend a whole lot more early on then you can by filing early.
once ss kicks in the higher payments can refill what was spent down and you do not need to keep as much powder dry with the higher payments to allow for market uncertainty. ss is like having a deferred annuity kick in. only you can't buy a deferred annuity with cola for any where near that cost anywhere as it does not exist.
our withdrawal rate will be higher early on since money i would have to keep liquid for the rest of our lives to pay bills can now be invested at greater returns since we will be less dependant in a few years on our own money and markets and more on a pensionized income from ss at a higher payment..
it does not matter what life expectancy charts show, you only have two possible outcomes. your dead or your alive.
my feeling is if you don't have at least 3 or 4 years of money to layout if you wanted to then your retirement is most likely underfunded to retire early.
it should be a choice if you are in decent retirement shape and not forced to take it early.
those that are not prepared and no longer can work have no choice obviously but that still does not negate the fact they are underfunded.
it should be by choice and how much you spend early on should not be factor if you really have enough to retire that early.
our own unique situations will determine what is right but the options should at least be able to be on the table.
There is also the argument that if you "can" afford to wait to take ss, then take it early as there's a good chance it will be "means" tested down the road. And if you really can't afford to wait, then keep working and take it later.
I'm not sure I agree that if you don't have enough saved to go the three, four, or five more years, then you shouldn't retire now. If you have a defined benefit plan and that plan along with your ss payment at 62 if plenty to fund your retirement, then I think the argument can be made for taking the payment at 62...why wait 4,5,6 years to enjoy retirement while you are young enough to do it.
Now, if you have a wad saved, I can see your point. Spend it down in the early years and take ss later when you will get more. However, that "wad" can still earn investment returns so your argument still isn't necessarily the only way to to in my opinion.
you have a bunch of different scenarios , some with choices ,some without
under funded means there is a short fall in income whether between pension and savings or pension and ss and savings is needed to provide an income but there isn't enough savings to do that for 30 plus years. .
hypothetically if you have a defined benefit plan that covers most or all of your income then you would have enough to have a choice of when to take ss since you are fully funded just on pension .
if it takes early ss and pension to meet the budget you are still fully funded.
in your example of a pension and zero savings with ss taken at 62 ,I would say that would be a case for taking it early as they have no savings but they are not under funded either
but if you have a pension and still need quite a bit from savings or no pension and still need quite a bit from savings and don't have not much savings you are under funded .
taking ss early and not having much savings may be a mistake . if you at least had enough saved to lay out up front you could delay and get bigger payments but taking ss early and not enough savings to even lay out may not be the best choice.
in my opinion you may be stretching things to thin by retiring early.
Last edited by mathjak107; 10-02-2014 at 12:41 PM..
you have a bunch of different scenarios , some with choices ,some without
under funded means there is a short fall in income whether between pension and savings or pension and ss and savings is needed to provide an income but there isn't enough savings to do that for 30 plus years. .
hypothetically if you have a defined benefit plan that covers most or all of your income then you would have enough to have a choice of when to take ss since you are fully funded just on pension .
if it takes early ss and pension to meet the budget you are still fully funded.
in your example of a pension and zero savings with ss taken at 62 ,I would say that would be a case for taking it early as they have no savings but they are not under funded either
but if you have a pension and still need quite a bit from savings or no pension and still need quite a bit from savings and don't have not much savings you are under funded .
taking ss early and not having much savings may be a mistake . if you at least had enough saved to lay out up front you could delay and get bigger payments but taking ss early and not enough savings to even lay out may not be the best choice.
in my opinion you may be stretching things to thin by retiring early.
There is also the argument that if you "can" afford to wait to take ss, then take it early as there's a good chance it will be "means" tested down the road. And if you really can't afford to wait, then keep working and take it later.
Aren't SS benefits already "means tested" ?
Due to an employer pension and IRA withdrawals, in 2012, 8.1% of my benefits were taxed, and in 2013 it was 10.3%. And 2014 is on-track to be 8.9%.
They already are means tested by taxing you when you exceed certain income levels.
Yes, but it could (and most likely will imo) get worse for higher wage earners. In fact two financial planners who I highly respect advise high earners to take it at 62...but the lower earners to keep working and take it later because they are convinced that there will be means testing (maybe more taxes, less benefits, etc.) for the higher earners in the not to distant future.....
Yes, but it could (and most likely will imo) get worse for higher wage earners. In fact two financial planners who I highly respect advise high earners to take it at 62...but the lower earners to keep working and take it later because they are convinced that there will be means testing (maybe more taxes, less benefits, etc.) for the higher earners in the not to distant future.....
But they will still be high income retirees.
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Means testing of SS
